Payson Signs Convention Hotel Lease

150-room Hilton hotel would anchor Event Center

After years of effort, Payson has taken a key, concrete step toward developing facilities that can handle small conventions, by this week signing a 26-year lease of town land to lure a 150-room Hilton hotel with 10,000 square feet of meeting space.

The Town Council has approved a free, 15-year lease for approximately 11 acres of town-owned land next to the rodeo grounds.

The lease agreement provides Hospitality Support Group LLC an additional 10 years' use of the prime highway frontage in return for 3 to 5 percent of the hotel's revenue. Technically, the Town will own the buildings the moment the hotel opens, but the developer will have rights to extend the lease to operate the building long-term.

The council's decision last week gives the developer one year to line up financing and start construction for a long-sought facility that will dramatically increase the town's ability to attract small conventions that need ballrooms and meeting rooms to accommodate up to 500 people, said Town Manager Debra Galbraith.

If the developer follows through, the facility could operate in cooperation with the recently expanded casino across the highway, which now has about 11,000 square feet of meeting space, said Galbraith.

"There's nothing even close to that size anywhere besides Flagstaff and the Valley," said Galbraith -- "not even in Sedona."

The recent expansion of the casino, coupled with the approval of the lease of a convention-oriented Hilton hotel, could finally enable the Payson area to compete for small conventions with Sedona, Flagstaff and even the Valley during the hot summer months.

The lack of hotels with such space has always hobbled Payson in competition for convention business, which normally brings visitors in the middle of the week when business otherwise lags.

The lease agreement included details of the proposed hotel, which would include major landscaping along the highway, entry from both the Beeline Highway and Green Valley Parkway, about 250 parking spaces, a Western style restaurant accessible from the highway, a "rustic saloon" on the first floor, a 1,500-square foot patio, and a three-story design to provide rooms and suites with expansive views.

The hotel would also feature a 6,000-square-foot central ballroom that could accommodate up to 500 people for a meeting or presentation or a smaller number for a banquet. Additional meting rooms would total about 4,000 square feet.

Moreover, the hotel will go up next to the rodeo grounds, which the town hopes to renovate and expand.

The town recently awarded a contract to the Valley-based Cleland Group to come up with a master plan for redeveloping the approximately 25-acre rodeo grounds. That master plan could result in a renovation of the rodeo arena to include protection from the weather that could make it suitable for year-round events, including expos, antique shows and concerts.

The upgraded event center could then supplement convention-oriented events at both the casino and the proposed new Hilton Hotel.

The consulting group should have at least a draft plan for a remodeling and upgrading of the rodeo grounds ready in the next 3-6 months, said Galbraith.

That would trigger a series of public meetings to approve the concept. She said the study will include ideas for financing the proposed renovation, which could include anything from general budget funds to citizen-approved bond issues -- depending on the scope of the recommended improvements.